Wallet feeling a little thinner lately? Watch to learn about inflation and get tips to minimize its effects.
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Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
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Fidelity In 30: Inflation is an investment strategy for individuals looking to protect their wealth against the negative effects of inflation. Inflation occurs when the general level of prices for goods and services in an economy increases, resulting in a decrease in the purchasing power of a currency. This can lead to reduced savings, lower investment returns, and overall financial instability.
To combat inflation, Fidelity In 30 recommends several investment strategies. The first is diversification, which involves spreading your investments across different asset classes such as stocks, bonds, and real estate. This helps to reduce the risk of any one investment being negatively affected by inflation.
Another strategy is to invest in companies that have a history of increasing their dividends. These companies tend to have reliable and consistent earnings growth, which can help to offset the impact of inflation.
Fidelity In 30 also suggests investing in commodities such as gold and oil, which tend to increase in value during periods of inflation. These investments can act as a hedge against inflation, helping to protect your portfolio against the negative effects of rising prices.
Finally, Fidelity In 30 recommends investing in Treasury Inflation-Protected Securities (TIPS), which are bonds that are designed to protect against inflation. TIPS pay interest based on a fixed rate, but the principal value of the bond increases with inflation, helping to maintain the value of your investment against rising prices.
Overall, Fidelity In 30: Inflation is a sound investment strategy for individuals looking to protect their wealth against the negative effects of inflation. By diversifying your portfolio and investing in assets that have historically performed well during periods of inflation, you can help to protect your savings and investments against the erosion of purchasing power caused by rising prices.
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